Vassilkovska v. Woodfield Nissan, Inc.

• Decision Date: 24 May 2005
• Docket Number: No. 1-03-1559.,1-03-1559.
• Citation: 830 N.E.2d 619
• Parties: Nadejda VASSILKOVSKA, Plaintiff-Appellee, v. WOODFIELD NISSAN, INC., Defendant-Appellant.
• Court: Illinois Supreme Court

830 N.E.2d 619

Nadejda VASSILKOVSKA, Plaintiff-Appellee, v. WOODFIELD NISSAN, INC., Defendant-Appellant.

No. 1-03-1559.

Appellate Court of Illinois, First District, Second Division.

May 24, 2005.

Swanson, Martin & Bell, Lisle (Bruce S. Terlep and Christian A. Sullivan, of counsel), for Appellant.

Krohn & Moss, Ltd., Chicago (Larry P. Smith, of counsel), for Appellee.

Justice GARCIA delivered the opinion of the court:

This interlocutory appeal stems from the trial court's denial of defendant Woodfield Nissan, Inc.'s (Woodfield) motion to dismiss and compel arbitration.¹

In July 2002, the plaintiff, Nadejda Vassilkovska, purchased a used automobile from Woodfield. In addition to the sales contract, the plaintiff signed an arbitration agreement (Arbitration Agreement). In February 2003, the plaintiff filed a four-count complaint against Woodfield. In April 2003, Woodfield filed a motion to dismiss and compel arbitration. In May 2003, the trial court heard arguments on Woodfield's motion and denied it. This interlocutory appeal followed with Woodfield seeking reversal of the trial court's May 2003 order denying its motion to compel arbitration.

BACKGROUND

In July 2002, the plaintiff purchased a used 2000 Nissan Sentra from Woodfield. The parties signed two separate documents. The purchase contract, signed by both parties, indicated an "unpaid balance" of $4,598.44. The plaintiff also signed a separate document titled Arbitration Agreement. In pertinent part the parties' Arbitration Agreement stated:

"That in consideration for your agreement to this Arbitration Agreement, we hereby waive any and all rights to pursue any legal action in a court of law, with the exception of those actions specifically excluded herein. * * *

A `Dispute' is any controversy or claim (other than: a claim relating to the buyer's failure to pay an agreed upon down payment or failure to pay any amount due pursuant to a promissory note executed in lieu of a cash down payment: as to the issuance, by buyer, of a check which is not honored by the buyer's bank; a buyer's failure to provide good title to a trade-in vehicle; a misrepresentation, by buyer, concerning the amount remaining due on any loan concerning a trade-in vehicle; any claim relating to the possession, repossession or replevin of the vehicle; or relating to actions to enforce any Retail Installment Contract executed by you in connection with the purchase of the vehicle) arising from or relating to the vehicle you have purchased from us on the date shown above. * * * The term `dispute' also includes any questions regarding whether a matter is subject to arbitration under this Arbitration Agreement."

In the parties' Arbitration Agreement the plaintiff agreed to waive her right to pursue any cause of action, related to the sales transaction for the car, in a court of law. In turn, Woodfield agreed to waive all rights to pursue any legal action in a court of law, except for those listed in the Arbitration Agreement as set out above.

Sometime later, the plaintiff received a financing agreement from her lender that indicated an "amount due" of $7,235.12 on her vehicle. The plaintiff noticed a $2,636.68 discrepancy between the "unpaid balance" on the purchase contract, and the "amount due" listed on the financing agreement.

In February 2003, the plaintiff filed a four-count complaint against Woodfield alleging a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 2000)), common law fraud, a violation of the Truth in Lending Act (15 U.S.C. § 1601(a) (2000)), and a violation of the Credit Services Organizations Act (815 ILCS 605/1 et seq. (West 2000)). According to the plaintiff's complaint, her allegations of fraud stemmed from Woodfield's misrepresentations "regarding the price of the Sentra and the costs of financing the vehicle." The plaintiff's complaint specifically alleged:

"6. Defendant represented to plaintiff that financing was approved such that there existed an outstanding balance of $4,598.41 to be paid over three (3) years at $154.00 per month.

7. Defendant misrepresented, omitted or otherwise concealed that:

a. The outstanding balance on the financing agreement was $7,235.12

b. The balance was to be paid over five (5) years."

Woodfield filed a motion to dismiss and compel arbitration arguing that the Cook County circuit court was the improper venue for the complaint pursuant to the parties' Arbitration Agreement.

The plaintiff responded to Woodfield's motion by emphasizing several facts. Specifically, the plaintiff was looking to purchase a vehicle, she told the sales person her spending limit was between $5,000 and $7,000, the sales person showed her a $9,000 automobile, and convinced her to attempt financing to afford the vehicle. Plaintiff alleged that after being convinced to purchase the vehicle, she was given a contract with an "unpaid balance" of $4,598.41 and the sales person told her she would pay $154 per month for three years. However, when she received a payment book from the lender, the unpaid loan balance and "amount due" was shown as $7,235.12 with payments spanning five years. The plaintiff argued that (1) the Arbitration Agreement should not be enforced because she was seeking rescission of the entire sales contract, including the Arbitration Agreement; (2) there was a lack of consideration supporting the Arbitration Agreement; and (3) Woodfield's attempt to defeat the plaintiff's substantive rights under the Consumer Fraud Act was unconscionable and against public policy.

Woodfield responded to the plaintiff's arguments by noting that the parties' Arbitration Agreement specifically allowed an arbitrator to decide if a controversy was subject to the Arbitration Agreement. Also, Woodfield argued, as subsequently stated in its brief before this court, that "it has agreed to arbitrate any and all claims that the plaintiff could bring. In so agreeing, [it] agreed to forbear its right to seek judicial review of those issues." Finally, Woodfield argued the Arbitration Agreement did not violate public policy because similar arbitration agreements had been upheld.

In May 2003, the trial court heard oral argument on Woodfield's motion. Although Woodfield asserts the trial court denied its motion based on the plaintiff's argument that the Arbitration Agreement was "unconscionable," we have found no record of that reasoning in the trial court's order. This interlocutory appeal followed pursuant to Supreme Court Rule 307(a)(1) (188 Ill.2d R. 307(a)(1)).

In our first opinion, Vassilkovska v. Woodfield Nissan, Inc., 351 Ill.App.3d 742, 286 Ill.Dec. 661, 814 N.E.2d 887 (2004), we affirmed the circuit court's denial of Woodfield's motion to dismiss and compel arbitration because we found that there was no consideration on the part of Woodfield to support the plaintiff's promise to arbitrate. As previously noted, on January 26, 2005, our supreme court directed us to vacate our judgment and reconsider our decision in light of Jensen v. Quik International, 213 Ill.2d 119, 289 Ill.Dec. 686, 820 N.E.2d 462 (2004).

In light of our supreme court's directive, we have reviewed the case before us and once again affirm the circuit court.

ANALYSIS

I. Standard Of Review

We first note that the parties disagree regarding the standard of review applicable to this case. Generally, interlocutory appeals "are reviewed under an abuse of discretion standard to determine whether the trial court was correct in granting or denying the relief requested." Peregrine Financials & Securities v. Hakakha, 338 Ill.App.3d 197, 202, 272 Ill.Dec. 959, 788 N.E.2d 263 (2003). Our review of the record in the instant case reveals that the circuit court heard oral argument on Woodfield's motion to dismiss and compel arbitration; however, it did not hold an evidentiary hearing prior to entering its order denying the motion to compel arbitration, and neither party argues that such hearing was necessary. The trial court's denial of Woodfield's motion was made in the absence of any findings as to any factual issues. Where the trial court made no factual findings and its decision was based on a purely legal analysis, the decision to deny Woodfield's motion to compel arbitration is reviewable de novo. See Peregrine, 338 Ill.App.3d at 202, 272 Ill.Dec. 959, 788 N.E.2d 263 (where a trial court's ruling was one of law, a de novo standard of review is appropriate); Hutcherson v. Sears Roebuck & Co., 342 Ill.App.3d 109, 115, 276 Ill.Dec. 127, 793 N.E.2d 886 (2003).

We note that our de novo review of this interlocutory appeal concerns only the question of whether there was a sufficient showing to sustain the circuit court's order denying the motion to compel arbitration. See Bass v. SMG, Inc., 328 Ill.App.3d 492, 496, 262 Ill.Dec. 471, 765 N.E.2d 1079 (2002).

II. Arbitration Agreement as Contract

An agreement to arbitrate is treated like any other contract. Gibson v. Neighborhood Health Clinics, Inc., 121 F.3d 1126, 1130 (7th. Cir.1997). The Uniform Arbitration Act (the Uniform Act) (710 ILCS 5/1 et seq. (West 2000)) empowers courts, upon application of a party showing an agreement to arbitrate, to compel or stay court action pending arbitration. 710 ILCS 5/2 (West 2000). However, without a contract to arbitrate, there can be no forced arbitration. Aste v. Metropolitan Life Insurance Co., 312 Ill.App.3d 972, 975-76, 245 Ill.Dec. 547, 728 N.E.2d 629 (2000).

The plaintiff contends that the Arbitration Agreement is not a contract at all because any promise to arbitrate by Woodfield was illusory and, therefore, the Arbitration Agreement is unenforceable because of the absence of the essential requirement of consideration to make out an enforceable contract.

Woodfield contends that the parties's Arbitration Agreement is supported by sufficient consideration as to make the Arbitration Agreement contractually binding...